New answers tagged

0

Yes, absolutely. It makes no difference to the NPV framework whether you look at opportunity costs and benefits rather than absolute or net cashflows. The tricky thing here is what you then mean by the IRR/discount rate/time preference. Let’s say I am involved in international aid. I could spend a lot today in a big project that might make a big difference, ...


0

For this type of analysis you'd look at the cash difference - meaning how much cash does it save by rebuilding the road versus maintaining it. The calculate the NPV of that savings, less how much it would cost to borrow the initial outlay. So if the road cost \$10 Million in year 0 to build but saved \$700,000/year in maintenance over 30 years, you'd have ...


Top 50 recent answers are included